State Home Sales Increase in June as Prices Stabilize

MADISON, Wis. – Existing home sales in Wisconsin saw positive gains for the first time this year, and median home prices were up slightly according to the most recent housing market report released by the Wisconsin REALTORS® Association (WRA). June home sales rose 4.5 percent compared to June 2013, and median prices were stable, rising 0.6 percent to $159,900 over the same period.

“This is a welcome sign since June is our most important month for sales,” said Steve Lane, chairman of the WRA board of directors. “In a typical year, Wisconsin sells approximately 11.5 percent of its homes in June, which is more than any other month of the year, so strong sales in June is important,” said Lane.

However given the harsh winter, Lane cautioned that even a solid showing in June won’t completely erase the weaker winter and spring sales. He noted that during the first half of the year, sales were down 4.9 percent compared to the first six months of 2013. All regions saw positive gains in sales in June with the double-digit growth in the West and the Central regions, up 15.6 percent and 10.1 percent respectively. Home sales in June were up between 3 and 6 percent in three regions — the South central, North and Northeast regions; and sales in the Southeast region were up slightly at 0.2 percent.

“We are headed in the right direction, and this sales growth is consistent with other economic signals we’re seeing in the state,” said Lane. The state unemployment rate for June stood at 5.7 percent, which is a percentage point lower than the rate in June 2013, and the state has seen modest job growth with just over 33,800 private sector jobs created over that same period.

Median prices stabilized in June, with prices up just 0.6 percent to $159,900 for the month compared to the same month last year. Year-to-date, the median price has increased 3.6 percent to $145,000 compared to the median price seen for the first six months of 2013. “Fortunately our price increases have moderated compared to late last year and early in 2014,” said WRA President and CEO Michael Theo. The annual pace of median price growth was 5.7 percent in the fourth quarter of 2013, followed by 4.4 percent in the first quarter of 2014, and a more sustainable 1.7 percent increase in the second quarter of 2014 relative to that same quarter in 2013.

The slight increase in interest rates and slightly higher prices in June have pushed affordability down. The Wisconsin Housing Affordability Index shows the percent of the median-priced home that a borrower with a 20 percent down payment and median family income can afford to buy at current mortgage rates. The index was at 206 in June 2014 compared to 220 in June 2013.

Both inventory levels and foreclosure activity appear to have steadied. Inventories statewide stood at 10.1 months of available supply, which is nearly the same as last year; however metropolitan counties have only 7.7 months of supply compared to 16.4 months of available inventory in rural counties. “Whereas urban markets are relatively balanced, rural counties continue to be buyers markets with ample supply available, which should translate into great opportunities in those parts of the state,” said Theo. In addition, residential foreclosures are down 22.5 percent for the first six months of the year compared to the first half of 2013. The reduction in foreclosures is essentially the same across metropolitan and rural counties, and the decline is similar in the first and second quarters of the year. “High levels of foreclosures create a drag on local housing markets, and while Wisconsin didn’t see the extreme level of foreclosure activity as other parts of the country, it’s good to see continued reduction of foreclosure activity in the state,” he said. Theo noted that it was encouraging to see home sales rebound in June. “Summer is a great time buy and sell homes, and using an experienced REALTOR® continues to be the best way to navigate these markets.”